The Nil Deposit Scheme (also known as a Deposit Replacement Scheme) has been available to tenants for a number of years. Instead of paying what can sometimes be a large deposit which is held in a Government Approved Deposit Scheme, the Tenant purchases an Insurance Warranty at a much smaller cost which then covers the Landlord for an end of tenancy claim in the same way as a traditional deposit would do.
Our provider for the Nil Deposit Scheme is REPOSIT
What are the advantages for a Tenant?
Instead of paying a deposit which will cost the equivalent of 5 weeks rent, the cost of the Nil Deposit Insurance Warranty is equal to one week;s rent which is paid direct to Reposit by the tenants. The cost of the warranty is shared between the tenants, so in the case of Joint Tenants, each will receive a payment request for a half share of the total cost of the warranty.
There is no worrying about getting a deposit released from your current tenancy and potentially money is freed up for your moving costs or the purchase of new furniture or appliances.
What happens at the end of the tenancy?
If the tenant renews the tenancy or stays at the property on a rolling tenancy, the warranty has to be renewed by the tenant. Reposit charge an administration fee for renewing the warranty which as of June 2022 is only £30.00.
If the tenant vacates the property the normal check out inspection is conducted and any dilapidation's discussed with the tenant, including any rent arrears. If the dilapidation are agreed, the tenant pays for those to be remedied. If they fail to pay, a claim is submitted to the Nil Deposit Scheme and if successful the insurer will pay out the costs and then look to recover them from the tenant.
If the tenant disputes the costs they have the option to take the claim to independent arbitration for which they pay a fee. In the event that the independent arbitration agrees with the tenant, this fee is refunded.
Tenants should be aware that the financial cover for which they are liable under the Nil Deposit Warranty is the equivalent of 8 weeks rent.
The Nil Deposit Scheme is an insurance based scheme, so unlike the traditional deposit scheme, the initial warranty premium and any renewal fees are not returned to the tenant at the end of the tenancy.
Can a Landlord demand that a tenant has to use the Nil Deposit Scheme?
No. It can only be offered as an alternative to the traditional Deposit Scheme. When the Nil Deposit Scheme is offered as an option by a Landlord, the decision on which option to use rests entirely with the tenant.
Where can I find out more Information?.
Further information can be found by clicking the button below.